Answered: Make a journal entry to record the…

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Make a journal entry to record the issuance of a bond with a face amount of $1,000,000 sold at 98.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 17MC: Huang Inc. issued 100 bonds with a face value of $1,000 and a 5-year term at $960 each. The journal...

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Question

Make a journal entry to record the issuance of a bond with a face amount of $1,000,000 sold at 98.

Cash $1,000,000

Premium on Bonds Payable $20,000

Bonds Payable $980,000

Cash $980,000

Premium on Bonds Payable $20,000

Bonds Payable $1,000,000

Cash $980,000

Discount on Bonds Payable $20,000

Bonds Payable $1,000,000

Cash $980,000

Bonds Payable $980,000

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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Willoughby Inc. issued 100 bonds with a face value of $1,000 and a stated rate of 4% and received $105,000. What is the journal entry to record the sale of the bonds?
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